OECD Common Reporting Standard: The Next Steps

The Common Reporting Standard (CRS) of the Organisation of Economic Co-operation and Development (OECD) came into effect on 1 January 2016 in “early adopter” jurisdictions, including the UK and popular fund jurisdictions such as the Cayman Islands, Ireland and Luxembourg. The CRS imposes new investor due diligence and reporting obligations on funds and other financial institutions based world-wide in 100+ participating jurisdictions (excluding the United States).

The CRS imposes different reporting and due diligence obligations for new accounts (those opened on and after the 1 January 2016 effective date) and pre-existing accounts (those opened before the effective date). By now, financial institutions in early adopter jurisdictions should have updated and amended their marketing and subscription materials to collect investor information and adapted their due diligence procedures in respect of new accounts to capture the CRS information that will need to be reported to local tax authorities – such reporting is expected to take place around 31 May 2017. In turn, the local tax authorities will exchange relevant information with tax authorities in other participating jurisdictions where the account holder is tax resident – this is expected to take place around 30 September 2017. Financial institutions yet to take such steps should do so promptly.